NetApp faces big challenges despite 8% revenue growth

NetApp for business technology
NetApp posted revenue of $1.52 billion (+8 percent) in the third quarter of fiscal 2018 with a net loss of $506 million.

The main achievement of NetApp was the 17 percent increase in product revenue. NetApp said the all-flash array annualized net revenue run rate of $2 billion increased almost 50 percent. The company expanded Cloud Data Services with introduction of NetApp Cloud Volumes for AWS.

George Kurian, chief executive officer of NetApp, said: With our Data Fabric Strategy and industry-leading solutions, we are winning new customers and expanding our business opportunity.”

Analyst firm TBR said traction in key markets, such as the ongoing acceleration of NetApp’s all-flash portfolio and the bolstering of NetApp’s market presence in cloud with its recently launched NetApp Cloud Volumes for Amazon Web Services (AWS) reinforced positive revenue momentum.

Recent partnership enhancements, including its converged infrastructure-related partnership enhancement with Fujitsu position NetApp well for long-term gains as the vendor expands its presence in growth markets.

Challenges for NetApp

NetApp continues to face an uphill battle against multiline peers, which are able to target the storage market independently from multiple angles.

Partnership activity expands NetApp’s ability to capitalize on these technology trends, but makes NetApp more dependent on partners relative to its peers to take advantage of these opportunities.

This is likely to result in a follower position in emerging markets, as NetApp has to partner to enter emerging markets such as hyperconverged infrastructure, due to the nature of the technology and the absence of servers and networking from its portfolio, said TBR.